Being a price taker, a perfectly competitive firm cannot receive a producer surplus in the short run
Indicate whether the statement is true or false
FALSE
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Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y in a two-variable diagram is
A) parallel to the horizontal axis. B) downward-sloping (left to right). C) parallel to the vertical axis. D) upward-sloping (left to right). E) a or c
Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward. If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)
A. increase in the price level. B. decrease in the price level. C. increase in real GDP. D. decrease in real GDP.
An increase in the price level causes
A. reduced investment spending, because interest rates increase, but an increase in net exports as U.S. residents buy fewer imports. The change in investment is usually greater than the change in net exports. B. reduced investment spending, because interest rates increase and a decrease in net exports as the higher prices induce foreigners to buy fewer U.S. goods. C. a reduction in net exports as higher priced U.S. goods induce foreigners to buy fewer American products, and an increase in investment spending as the higher prices make businesses more profitable. D. increased government spending, which crowds out investment spending, so that the net effect on aggregate demand is nil.
Leontief's results were considered paradoxical because the United States was believed to be
A) technologically efficient relative to the rest of the world. B) capital abundant relative to the rest of the world. C) labor abundant relative to the rest of the world. D) All of the above.